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Bond Boom's Thin Ice

Corporate Debt, and Investors
Who Bet on It, Face End of Easy Money

By

Serena Ng

Updated Feb. 6, 2007 12:01 a.m. ET

It is the biggest worry in the corporate bond market these days: What comes down must go up.

The interest rates corporate borrowers pay on their debt have fallen in the past few months. Not only is inflation tame -- which helps hold rates down -- but corporate defaults have sunk, making lenders willing to take more chances with their money for less return.